Morningstar MSCI Composite Hedge Fund Index up 1.9% in July and 3.7% YTD, sector leaked $6.5bn in June

Morningstar, Inc., a leading provider of independent
investment research, today reported preliminary hedge fund performance for July as well as estimated
asset flows through June 2012. The Morningstar MSCI Composite Hedge Fund Index, an asset-weighted
composite of nearly 1,000 hedge funds in the Morningstar Hedge Fund database, was up 1.9% in July and
3.7% for the year to date return through July 2012.

Managed futures strategies were some of the biggest winners in July, as the Midwest's worst drought in
25 years resulted in strong and persistent upward trends in major agriculture commodities, such as
soybeans, wheat, and corn. The Morningstar MSCI Systematic Trading Hedge Fund Index, which includes
managed futures funds, jumped 4.3% in July, bringing its year-to-date performance to 2.7%.

Currency hedge funds benefited from their short positions on the Euro. Despite a late month rebound, the
Euro depreciated substantially against the U.S. dollar throughout July, reaching a two-year low. The
Morningstar MSCI Currencies Hedge Fund Index rose 3.9% in July, making it one of the best-performing
Morningstar Hedge Fund Indexes for the month.

Unlike currency or commodity markets, the U.S. and the European stock markets were directionless until
the president of the European Central Bank vowed to do ‘whatever it takes’ to save the Euro on July 25.

The late month rally drove the S&P 500 TR Index and the MSCI Europe NR Stock Index into the black, rising
1.4% and 1.1%, respectively. North America and Europe focused hedge funds underperformed the stock markets due to their short positions—the Morningstar MSCI North America Hedge Fund Index and the
Morningstar MSCI Europe Hedge Fund Index rose 0.4% and 0.2%, respectively.
Small capitalization stocks underperformed large capitalization stocks in July, as evidenced by the 1.4%
decline of the Russell 2000 TR Index. The Morningstar MSCI Small Cap Hedge Fund Index was one of the
few hedge fund indexes that posted a decline in July, dropping 0.8%.

July returns for the Morningstar MSCI Hedge Fund Indexes are based on funds that reported as of August
16, 2012. June asset flows are based on funds that reported as of August 15, 2012. Hedge fund investors,
managers, consultants, and advisors can access additional information through Morningstar Direct
SM
, the
company’s global research platform for institutions.

Morningstar has approximately 11,000 hedge funds and funds of hedge funds in its database. Morningstar
calculates hedge fund indexes by applying the MSCI Hedge Fund Index Methodology and Hedge Fund
Classification Standard to Morningstar’s hedge fund database. These indexes demonstrate the
performance of hedge funds to investors who have hedged their currency exposure back into U.S. dollars.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe,
Australia, and Asia. Morningstar also offers investment management services through its registered investment advisor subsidiaries and has more than $186 billion in assets under advisement and
management as of June 30, 2012. The company has operations in 27 countries.
www.morningstar.com